Vermont ends single payer bid

Feds now left to confront the issue

Many American dislike the Affordable Care Act not because it goes too far but because it does not go far enough, as observed in the chart below from the Kaiser Family Foundation and the dark blue.  About 24 percent of Americans believe the ACA should be expanded, and by that, many mean a Medicare-for-All single payer financing scheme that takes insurance companies out of the equation.

Since the ACA is nothing like single payer, for four years now, the candle in the window for single payer advocates has stood in the governor’s office in the Vermont State House.  Gov. Peter Shumlin got elected in 2010 promising to bring a single payer health financing scheme to Vermont, and various people in his administration have been hard at work figuring how to make it happen.  Last Wednesday, though, Shumlin snuffed out the candle, admitting that he couldn’t make the numbers work.

Two stories are important here.  First, what happened in Vermont, and second what does this mean for the future of single payer health care in the US?

Gov. Shumlin’s explanation is all about dollars and cents.  In mid-December, when his staff showed him the recent set of cost estimates (generated by MIT’s Jonathan Gruber), he learned that the state would need to raise about $2.5 billion in 2017 to replace private health insurance with government payments to hospitals, physicians, and other providers – requiring a new payroll of 11.5 percent and an new income tax of 9 percent.  Prior estimates suggested that the total new cost for the state could be as low as $1.6 billion.

Shumlin’s determination buckled under the weight of the new estimates, though for reasons beyond dollars and cents.  In November’s gubernatorial contest, Shumlin received 46 percent of the vote to his Republican opponent Scott Milne’s 45 percent, throwing the race into the state’s House of Representatives in January.  Though Shumlin’s selection is assured in a heavily Democratic House, his inability to surpass 50 percent was less than a vote of confidence in this most ambitious and risky plan – especially when Milne made opposition to single payer a cornerstone of his campaign.  How likely would Senate and House members have been to raise taxes to a level that would nearly double the current financial size of state government ($2.7 billion currently) – we will never know.

It is true, as advocates assert, that single payer’s cost is less than the cost of the status quo.  That points to the reason why single payer is so difficult – the politics.  Even though the program may be positive or revenue neutral for the whole state, many individuals will end up losers and well financed opponents will do whatever they can to make as many people as possible believe they will be losers.  This reality makes inconceivable the failure of the Shumlin administration to do meaningful public education over the past four years.  His inexplicable approach was an unwinnable insider’s game.

So what’s the future for single payer?

In early December, retiring US Sen. Tom Harkin, an Iowa Democrat, told the Washington Post that Democrats in 2010 should have pursued “single-payer right from the get-go or at least put a public option. … We had the votes to do that and we blew it.”  Writing as someone who briefly worked for Harkin when he became Chairman of the Senate Committee on Health, Education, Labor and Pensions (HELP) after the death of Sen. Edward Kennedy, he is wrong.  The number of Democratic Senators who would have voted for single payer in 2009 or 2010 never exceeded single digits, and the so-called public option died when Democrats could not get all 60 of their members to support it after lots of trying.

So what is single payer’s future?  Like all good Democrats, I harken to the words of my late boss, Sen. Kennedy: “…the work goes on, the cause endures, the hope still lives, and the dream shall never die.”

Today, in the United States, we have three-plus mega-health insurance programs in Medicare, Medicaid, and the new ACA subsidy/exchange structure.  Medicare is actually two programs when you count Medicare Advantage.  Medicaid is nearing 70 million covered lives.  And as employer coverage continues its 25 year plummet, the ACA subsidized exchange world is going to grow in size and importance.

It may take 5, 10, 15 years, or even longer – but at some point, some Republicans and Democrats will propose federal health insurance consolidation.  The illogic and wastefulness of running these enormous, siloed health insurance behemoths will become clear – that will be the backdoor start and momentum will grow.  As shown in the chart below, the expected rate of growth of federal health care spending has moderated, though the direction is the same:

The Vermont failure, I believe with regret, signals the end of serious efforts to achieve single payer at the state level.  It’s too big a lift, economically and politically.  Shumlin inadvertently blew out the candle.

At the federal level, I do expect it – but through the backdoor, not the front, and no time soon.  New York Times columnist Paul Krugman calls the US government a giant insurance company with an army.  As you celebrate or mourn the death of single payer at the state level, keep your eye on the big ball.

Meet the Author

John McDonough is a professor at the Harvard School of Public Health and the author of Inside National Health Reform.